Calculator Allowed: Yes
Transcription of this question: 4.Adventures for All (A4A)Tama Toki founded Adventures for All (A4A), which ownsfour adventure parks employing 342 people. The parks offeradventure activities such as high wire and mountain biking.A4A’s target market is teenagers and adults. A4A’s missionstatement is “safety and affordability at A4A are the mostimportant reasons for a great time for all”.A4A uses predatory pricing. Its competitors are themeparks and adventure centres. However, social trends arechanging. Many teenagers prefer social networking ratherthan adventure activities. A4A’s sales revenue and profits are falling.Tama discussed with senior managers two possible growth strategies:Option 1.Option 2.Through extensive promotion, attract children and adults with disabilities and accessrequirements to the parks. This approach •would require specialized training forexisting staff. No modifications to the parks would be requiredOffer corporate team-building activities. A4A would develop specially designedprogrammes for senior leadership teams to spend three days in newly built conferencecentres located at the parks. Corporate teams would engage in adventure activitiestogether and then discuss strategic options for their organizations.Option 2 could be highly profitable. A4A could charge high prices for these programmes.However, some of Tama’s senior managers argued that A4A should continue to provide”adventures for all” and not just to a group of highly paid senior leadership teams.The two options created major disagreements. Two senior managers, working with Tama since thecreation of A4A, threatened to resign if Option 2 was implemented. Two other senior managersargued that without Option 2 many jobs at A4A were under threat.(a)(b)(c)(d)Define the term target market.Explain two roles of A4A’s mission statement.Explain one advantage and one disadvantage for A4A of using a predatorypricing strategy.Using the Ansoff matrix, evaluate the two possible growth strategies for A4A.